Reaching your golden age with much preparedness gives you a lot of advantages over those who did not plan well. In most cases, getting your pension allows you to live a life of leisure. You can now do what you want, like travel, cruise or take vacations. Once you have retired from work and the kids are all settled happily, you are secure in your finances being a well-prepared pensioner.
However, there are still unexpected financial stresses that can come in your golden age. Whatever emergencies you might have, you have various pensioner loans that you can explore if you have urgent financial needs. For instance, you need a significant home renovation, new appliance upgrades, or you’d like to have a new car.
These instances call for funds for your pension allowance might not suffice. Likewise, loan options are limited to retirees and pensioners. Some lenders need to see that you have the capacity to pay and that you are not just living on your monthly pension allowance. If you have a substantial amount of money in your bank account, such as a time deposit, you have better chances of getting approved for a loan.
Things to Remember before taking out a Pensioner Loan
While many lenders are offering particular loans for pensioners, there are still instances when lenders take a careful look before approving your application. Here are some things to keep in mind:
- Avoid applying with several lenders in a short period. Doing this can impact negatively on your credit score
- Try to apply with one lender first. If you do not qualify, find out the reason why. Once you know the reason, you can make adjustments with your application and file with a lender who is more lenient with the same case as yours.
- Before pursuing the loan, understand the terms, conditions, and fees involved with it first.
- Check the credibility of your lender. You may be able to find reviews, complaints, and feedback about your lender from online sites.
What Types of Pensioner Loans are Available for You?
Depending on your current situation, several pensioner loan options will be open for you. These are similar to personal loans too, but they are for retirees and pensioners who can present pension allowances as proof of income. Here are some options for you to consider when seeking loans during your golden age:
Pensioner Personal Loans
One of the easiest ways for pensioners to get a loan is when they have a long-standing account with a bank or any financial institution. With this, the lender is aware of your economic history, and they will be more likely to offer personal loans. Comparatively, it will be more challenging for pensioners who will be starting from scratch with a new lender. If you are applying with a new lender, expect to comply with several documentary requirements for assessment and approval.
Pensioner Car Loan
Due to the rise of abusive car loan providers, pensioners should be more careful when taking out this type of loan. There are a lot of irresponsible car loan lenders that offer similar to payday loans. These offers often come with confusing terms, and lenders apply high-pressure sales tactics. If you need small-car loans, consider legitimate lending institutions. For higher loan amounts, take out typical loans from credit institutions or your bank.
Pensioner Home Loans
If you are a low-income senior pensioner, the options for pensioner home loans might be limited. Lending institutions have to consider your age and your income for the approval of your loan. On the other hand, if you are the type of pensioner who is considered “asset rich,” you might be qualified to get a reverse mortgage loan. It is offered to people 60 years old or more who already own a home or property. The idea is to reverse the equity of their property and encash it via loan.
There is no need for an income, nor do you need to make repayments on a reverse mortgage loan. But there are interest and fees charged. The debt is paid when the borrower sells the property, moves into a retirement home or when the borrower dies.
Consequently, pensioners thinking of getting a home loan for the purchase of the property may find it more challenging. It depends on several factors too. The best way to understand your home loan options is to discuss it with a mortgage broker specializing in loans for pensioners.
Government Loan Options
Seniors and pensioners struggling to get approved for their loans from various lenders can check Government loan schemes. There is special assistance offered for pensioners and senior citizens. Here are some offers to consider:
Government Pensioner Loans – this type of loan is for seniors but are not qualified for their pension due to issues with their assets and income. This offer allows seniors to access capital attached in assets to get extra funds.
Government Advance Payments – for those regularly receiving Centrelink pension allowance, you may be qualified to get advance payments up to one or three weeks payments. It must be paid within six months, and the good thing about this scheme is that it is free from interest. If you are interested in a centrelink loan, apply with Perfect Payday today.
No Interest Loan Scheme (NILS) – this loan scheme offers up to $1,200 to Government Centrelink pension card holders. This offer is interest-free and will help pensioners deal with their common emergencies like car maintenance, household expenses, and medical needs.
Loan Traps Pensioners Should Look Out For
Pensioners are prone to falling for those loud ads that offer fast, easy, and instant cash loans. They are like payday loans that are easily attainable and can provide you the quick fix for your tough financial times. However, these types of loans are not as impressive or beneficial as they seem. Beware of these types of loans for the following reasons:
Applying for payday loans can become a dangerous habit. It can lead vulnerable pensioners into a large amount of debt.
Some interest rates are expensive, and it is important check them out carefully before borrowing.
These loans have hefty charges, and they are deducted from the amount that you borrow.
These loans are for short term only. You have to pay for the amount borrowed within the prescribed period, which puts a lot of pressure on borrowing pensioners.
Are There Other Options for Getting Extra Cash?
Although you might be enjoying your retirement age and your pension, you might have some extra time for a side job. Even if you are receiving a pension, you are still allowed to join the workforce beyond your retirement age. Other than staying for a regular job, you may try your hands on a business venture. Some seniors make extra funds selling unwanted items online or by holding garage sales. Likewise, dog walking and sitting will keep you fit and earn you some extra income. Other than that, you may also do coaching, tutoring, or consultancy work on a part-time basis.